The Dr Keith Rowley administration in Trinidad & Tobago is boasting of its ability to chop the country’s fiscal deficit for 2022 to 0.2 per cent of gross domestic product (GDP).

The administration is reporting that, at the end of the 2022 fiscal year on September 30, 2022, the fiscal deficit was revised downwards to 0.2 per cent. The Ministry of Finance is reporting that the total revenue for the 2022 fiscal year was determined to be $54.21 billion, which is $2.57 billion more than the revised estimate announced in September 2022.

This was also $10.88 billion more than the original revenue estimate of $43.33 billion for fiscal 2022, which was determined in October 2021. The finance ministry explained that total expenditure for fiscal 2022 is now estimated at $54.54 billion, which leaves the fiscal deficit for 2022 now estimated at $329 million.

This estimate is less than 0.2 per cent of GDP and well below the international benchmark for fiscal deficits of three per cent of GDP.

“In essence, we have achieved an almost balanced national budget in Fiscal 2022, something that has not occurred in Trinidad and Tobago since 2008, 14 years ago,” the Ministry of Finance stated in a news release to the local media.

Fiscal deficit over the years

The fiscal deficits between 2016 and 2021 would have resulted in an increase in T&T’s debt, as the Government borrowed from domestic and external sources to fill the gap between expenditure and revenue. The 2022 Review of the Economy indicates that T&T’s total Government debt, excluding open market operations, increased by 49.2 per cent from $84.87 billion in 2016 to $126.62 billion in 2021.

The Government would also have tapped the Heritage and Stabilization Fund to fund the deficits, especially in the 2020 and 2021 fiscal years, caused by the COVID-19 pandemic.

In delivering the 2023 budget on September 26, 2022, Finance Minister Colm Imbert, acknowledged that the invasion by Russia of Ukraine in February 2022 has heightened the supply constraints already affecting the global economy because of Covid-19, thereby causing an escalation in commodity prices.

He reported that all of the petrochemical commodities that T&T exports experienced price increases in the 2022 fiscal year, including oil prices, which doubled, ammonia prices, which increased by 300 per cent in one year and the price of Urea increasing by 100 per cent.